In a survey of CRE executives responsible for real estate portfolios totaling billions of square feet across the globe, 70% said that sustainability is a critical business issue for CRE today. Although most executives view sustainability as a priority, only 37% would consider paying a premium (between 1% to 10%). Meanwhile, 46% always consider energy labels (such as Energy Star or HPE), and 41% always considering green building certifications (such as LEED, BREEAM, IEMA, NABERS Energy, Green Star, GreenMark or CASBEE).

A significant 89% consider sustainability criteria in making leasing decisions, although 21% indicated that they would only be willing to pay a premium rent if it was offset by lower operating costs.

Even though obtaining funds to implement sustainability strategies is a difficult or an extremely difficult challenge for 67% of respondents, 74% would pay a premium (generally 1% to 5%) to retrofit owned space for sustainability criteria, up from 53% in 2008.

“These results clearly show that sustainability as an issue is here to stay, but companies are increasingly aware of the commercial realities,” said Dan Probst, chairman of energy and sustainability at Jones Lang LaSalle. “It is no longer enough to simply be ‘green'; organizations want to see the benefits to the bottom line.”

“The survey results show that corporate real estate executives continue to be very focused on sustainability,” said Michael Anderson, Research Manager at CoreNet Global. “Despite the economic challenges of the past year…nearly three-quarters would pay to retrofit properties they own.”

The focus on cost reductions is seen in the 60% that are adopting workplace strategies to meet sustainability goals while reducing overall occupancy costs, up from 54% in 2008. CRE executives also continue to focus on strategies that are easy to implement and provide short-term cost savings, such as energy efficiency programs and waste recycling.

In terms of metrics, companies want to see bottom-line outcomes, with energy costs ranked as the most important portfolio metric by 37%, followed by employee health and productivity at 29%; 45% are highly involved in providing sustainability performance data.

However, making targeted investments in sustainability initiatives can be challenging. More than 50% said that insufficient industry metrics, difficulty in calculating ROI and lack of tools for collecting necessary performance data are difficult or extremely difficult challenges.

“Companies are looking for help in making targeted sustainability investment decisions and measuring the results in terms of both environmental and financial performance,” Probst said. “Clarification of industry metrics globally, tools that collect data and turn it into information, and clear methodologies for calculating project ROI will be critical to overcoming these challenges.”

The global survey of 231 corporate real estate executives was conducted in September and October 2009. A copy of the summary report is available here.

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